Aker BioMarine and Neptune close US$34m transaction to accelerate krill oil industry

09 Aug 2017 --- Neptune Technologies & Bioressources Inc. and Aker BioMarine Antarctic AS have concluded an agreement whereby Aker BioMarine has acquired Neptune’s krill oil inventory and IP for a cash consideration of US$34 million, paid at closing.

The companies reported that Neptune will exit its bulk krill oil manufacturing and distribution activities, and it will support Aker BioMarine with the transition of its customers, krill oil inventory and intellectual property for a total cash consideration of US$34 million. 

“Neptune has made a strategic decision to withdraw as a bulk krill oil supplier, while Aker BioMarine wants to increase investment in the category, so this agreement is a perfect fit for both parties. This acquisition will allow us to increase investments in science and product innovation, sustainable krill-harvesting practices and marketing support for our customers, which in turn will build excitement and accelerate growth in the omega 3 market,” Matts Johansen (pictured below), CEO of Aker BioMarine, says. 

“Neptune’s customers and products will be integrated into Aker BioMarine, including Neptune’s popular NKO brand. These customers will continue to receive the products they are used to and, at the same time, benefit from the additional products and support Aker BioMarine will offer to drive growth in the omega 3 market.”

“Earlier this year, we kicked off the Omega-3 Index Project to bring more awareness to the health risks of low omega 3 levels. We also initiated a study to evaluate the effects of krill oil omega 3s on the world’s toughest Army recruits, the US Rangers. These are the types of activities we will continue to move forward with, and now in connection with the NKO brand,” explains Johansen.

“The marriage of these two brands is significant for the krill oil business. We have only just scratched the surface of the potential of krill oil and look forward to bringing NKO into our brand portfolio that we spent a decade building,” Johansen adds.

Speaking during an earlier interview with NutritionInsight, Johansen said that Aker BioMarine remains “very focused on innovation; that’s a core part of our strategy. We are the leader in krill-related products: we harvest 60 percent of all the krill in the world and have 60 to 70 percent market share, so if any development’s going to happen within the krill space, it has to happen with us. We have 11 people with PhDs in the company constantly looking for new opportunities, doing research and developing new products.”

Some of the proceeds will be used to reduce debt with high interest rates and the balance will be allocated to innovation projects, such as the Green Valley medical cannabis oil extraction project, and to acquisitions, in line with its growth strategy.

“This transaction marks an important step in Neptune’s next phase of development. Neptune believes strongly in the health benefits that krill oil provides and will remain actively involved in this sector via our investment in Acasti Pharma Inc. and also through finished form soft gel capsules from our Solutions Business,” says Jim Hamilton, President and CEO of Neptune.

Neptune’s Sherbrooke facility is not part of the transaction, and the company is now exploring potential alternatives for its use through the development of unique extractions targeted toward high-potential growth segments. While a small team of people will be retained to continue work on special projects including the medical cannabis project at the facility, a large number of its employees (approximately 50) will see their employment end as part of this transaction.

As for Neptune’s involvement in krill oil, it will continue to offer market-ready finished products, such as its krill oil soft gel capsules, via its Solutions business in partnership with Aker BioMarine. Neptune also remains committed to its investment in Acasti Pharma, which holds strong potential.

“One of the key factors of this transaction for Neptune is that it will benefit from a stronger financial position. Considering high-interest debt reduction and new borrowing capacity to be negotiated, we intend to focus on potential acquisitions and the medical cannabis oil extraction opportunity. The area of focus for potential acquisitions will be specialty ingredients, brands and the Solutions business, which our management team intends to pursue vigorously. We are fully aware that this transaction will affect many of our employees and we would like to thank them for their hard work and dedication,” concludes Jim Hamilton.